Wednesday, April 5, 2017

Federal Nonprofit Fraud Case Delayed

Nonprofit Quarterly reports on the trial of Jonathan Dunning, former CEO of Birmingham Health Care and Central Alabama Comprehensive Health. Mr. Dunning was indicted on 122 counts alleging that he shifted approximately $14 million of federal funds to outside businesses that he controlled.

The case has been postponed due to complexity, undoubtedly due to another nonprofit being added into the case. A credit union, that government officials claim was central to the scheme, had many Birmingham Health Care upper executives on its board of directors. The National Credit Union Administration claims that the credit union in question became “insolvent due to management operating the credit union in an unsafe and unsound manner including a serious conflict of interest with the credit union’s sponsor, a continuous lack of action by management to address issues, persistent non-compliance with established timelines for submitting reports, and problems with the credit union’s books and records.”

At issue, among other things, is whether Mr. Dunning committed conspiracy, bank fraud, and/or money laundering in his dual role of nonprofit CEO, and controller of private firms. Also, whether and to what extent the former CEO can be held liable for controlling his replacement to perpetuate the fraud. Allegedly, once the fraud was first being discovered, Mr. Dunning stepped down, but handpicked his successor and exercised complete control over him.

The original story covering this nonprofit mismanagement and conflicts of interest scheme can be read here.

 

David A. Brennen

http://lawprofessors.typepad.com/nonprofit/2017/04/federal-nonprofit-fraud-case-delayed.html

Current Affairs, Federal – Judicial, In the News | Permalink

Comments

Really impressive post. I read it whole and going to share it with my social circules. I enjoyed your article.
Thanks for sharing this great article.

Posted by: Abhilasha Sharma | May 25, 2017 4:13:21 AM

Post a comment